TOKYO – Sharp Corp. agreed Thursday to a 489 billion yen ($4.4 billion) takeover by Taiwan's Hon Hai Precision Industry Co., also known as Foxconn, becoming the first major Japanese electronics maker to be acquired by a foreign company.
Under the agreement, Foxconn will gain a 66 percent stake in the company. Sharp was considering both Foxconn's bid and an offer from a Japanese government-backed consortium of Japanese investors.
Despite Japan's rapid globalization, some have expressed fears a Foxconn takeover will result in the country losing technology to foreign interests.
Foxconn is a major contractor to Apple Inc., assembling products such as iPhones.
Media reports in Japan that a deal might be imminent had sent Sharp share prices initially higher on the Tokyo Stock Exchange, but they finished 14 percent lower several hours before the agreement was announced.
Osaka-based Sharp has long been a prized brand in Japan, beginning with its sale of mechanical pencils, still known as "sharp pencils" here. It also pioneered hand-held electronic devices.
Sharp had its beginnings as a Tokyo-based metalworking shop in 1912. It later made its fame with Aquos flat-panel TVs and nifty Internet-connecting cellphones, long before the arrival of iPhones in Japan.
But its finances deteriorated in recent years as prices of LCD panels dropped, and it could not beat competition from Asian rivals.
Analysts say Sharp's future remains uncertain even with the takeover because of challenges in restructuring its consumer electronics operations.
Sharp suffered a 108 billion yen ($964 million) loss over the nine months through December. It has not released a full year profit or loss forecast.
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